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Israel's Netanyahu calls for early elections amid budget crunch

October 9, 2012 | 12:05
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JERUSALEM -- Israeli Prime Minister Benjamin Netanyahu announced Tuesday night that he is disbanding his right-wing government and calling for early elections, blaming a coalition deadlock over how to slash nearly $4 billion from next year’s budget.

Speculation has been rife for months that Netanyahu’s inability to pass a 2013 budget would force him to dismantle what has been one of Israel’s longest-serving coalition governments.

New parliamentary elections, which were expected to take place in October 2013, will likely now occur by February.

Though most polls suggest Netanyahu and his Likud Party will remain in power, the makeup of his next coalition could change if the budget becomes the driving issue, analysts say.

Amid a recent spike in government spending and a weakening economy, Israel’s budget deficit has doubled over the past year, causing concern in financial markets, both in Israel and abroad.

This summer, Netanyahu pushed through tax hikes and other austerity measures, but they were only enough to provide a third of the revenue Israel needs to meet its targets.
After several weeks of negotiations, the prime minister said he was unable to reach an agreement with his coalition partners over where to make further cuts.

Religious parties objected to reducing government benefits that many of their ultra-Orthodox supporters receive. Military hawks scoffed at proposed cuts to Israel’s Defense Ministry.

By disbanding the government, Netanyahu is hoping that his reelection will give him a renewed mandate to push through the needed cuts or allow him to create a new coalition that will back him.

Critics, however, said Netanyahu was simply postponing painful -- and likely unpopular-- economic decisions until after the election.

It is the second time this year that Netanyahu has announced the disbanding of his government. In May, he called for early elections amid a political battle over whether to begin drafting religious students into the army.

That election was quickly canceled when the centrist Kadima Party surprised everyone by agreeing to join Netanyahu’s coalition, a move that was supposed to give the prime minister the political leverage he would need to approve a military-draft bill.
Two months later, Kadima withdrew in frustration and the proposed military-draft law was shelved.